- Though the income tax slabs and income tax rates remain the same, there have been some measures in the form of hiking exemption limits. Exemption limit on health insurance premium has been increased to Rs. 25,000. It was Rs. 15,000 earlier. There is a deduction of Rs. 30,000 for medical expenditure and Rs. 80,000 for specific diseases for senior citizens above the age of 80 years who are not eligible for medical insurance. Tax deduction limit is increased by Rs. 25,000 for differently abled persons and people with severe disability.
- Social security schemes for the lower income groups have been launched.
- Individuals, HUFs, firms, cooperative societies, judicial persons, Association of Persons (AOP) and Body of Individuals (BOIs) with an income of Rs. 1 crore or more per year will have to pay a surcharge of 2%.
- It is proposed that wealth tax will be abolished.
- Employees who are working in companies where there is EPF can now opt for EPF or NPS.
- There is an additional deduction of Rs 50,000 for contribution to pension fund and new pension scheme
- Employees benefitting from Employee State Insurance (ESI) can choose between ESI or any health product covered by IRDA
- Transport allowance for salaried employees has been increased from Rs. 800 to Rs. 1600.
Investments and Business
- An individual has to quote the PAN number for any transaction made worth more than Rs. 1 Lakh.
- Gold will be monetised which means there will be schemes where investors can deposit gold and earn interest. Jewellers can get loans on the basis of their gold deposits.
- A Rs. 1000 crore corpus will be established for facilitating entrepreneurial units and startups
- Corporate tax will be reduced to 25%
- There will be 100% tax exemption for contributions to 'Swachh Bharat Abhiyan' and 'Clean Ganga Fund' by corporates as part of their CSR activities.
- General Anti Avoidance Rules (GAAR) will be deferred by 2 years
- Custom duty has been reduced on 22 items
- Custom duty has been increased on certain things like commercial vehicles and tobacco.
- A Mudra bank will be set up which will lend money to lower income groups
- AIIMS, IITs and IIMs will be set up in different parts of the country.
- It is proposed that a Centre for Film Production, Animation and Gaming will be set up in Arunachal Pradesh.
- An Apprenticeship Training Institute for Women will be set in Haryana and Uttarakhand
- A National Insurance scheme by the name of PM Suraksha Bhima Yojana is proposed to be set up. It offers coverage of Rs. 2,00,000 for a premium of Rs.12 per year.
- Rs. 1000 crore is set aside for startups and techno finance incubation.
- An IT based student aid system will be set up for needy students.
- A sum of Rs. 1000 crores will be allocated to Nirbhaya fund.
- A sum of Rs. 8,00,00,000 is allocated for credit for agriculture.
- There is increased fund allocation for Roads and Railways
- A sum of Rs. 2.46 trillion is allocated for defence and Rs. 331.5 billion for the health sector.
- Subsidies for fertilisers, agriculture and set up.
- National heritage sites will be developed and visa on arrival will be given to tourists from 150 countries to boost tourism and tourism related revenue.
Rules and Regulations
- In case of Non-filing of tax returns, or inadequate or incorrect filing of returns can lead to prison time up to 10 years.
- Hiding of income can also lead to prison time.
- A comprehensive law on black money will be implemented and a separate Benami property transaction law will be implemented for black money in real estate.
Overall, the budget targets growth and social security. It encourages savings and retirement investment. Some measures like capital funding for PSU banks, increase in home loan costs due to increased service tax and no specific announcements for real estate or jewellery industries have been criticised. Let us know your take on the budget.
The author can be reached at email@example.com